Find your break-even point. Before the optimism kicks in.
Before I get excited about a sales target, I want to know how much we need to sell just to cover our costs. The bank tends to appreciate that question.
Break-Even Analysis
Assumes constant selling price and variable cost per unit, fixed costs within the relevant activity range, and a single product or stable sales mix. Whole units are rounded up. No tax calculation is included.
Advanced capacity and safety check (optional)
Margin of safety:
Capacity check:
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The math is simple. The assumptions matter.
Contribution margin per unit is selling price less variable cost per unit. Divide fixed costs by that amount to calculate break-even units.
To find the units needed for a target operating profit, add that target to fixed costs first. The model assumes unit economics stay stable across the sales range.
NEXT TOOL: Price Increase & Margin Impact →
Numbers are only half the conversation.
Need help translating the result into a decision your business can actually use?